Discussion Papers

No.328 Inflation Targeting in Korea, Indonesia, Thailand, and the Philippines: The Impact on Business Cycle Synchronization between Each Country and the World

by INOUE Takeshi, TOYOSHIMA Yuki, and HAMORI Shigeyuki

March 2012


This paper is an overview of the results from a questionnaire survey and subsequent supplementary interviews of Iran’s large apparel firms This paper empirically analyzes whether and to what extent the adoption of inflation targeting (IT) in Korea, Indonesia, Thailand and the Philippines has affected their business cycle synchronization with the rest of the world. By employing the dynamic conditional correlation (DCC) model developed by Engle (2002), we find that IT in Asia has little effect on international business cycle synchronization and the effect is positive in some of the countries, if any. These findings basically seem to be consistent with the evidence from relevant literature.

Keywords: Asia, business cycle synchronization, DCC, inflation targeting
JEL classification: E52, E58, F42

PDF (346KB)

Please note that discussion papers are works in various stages of progress and most have not been edited and proofread and may contain errors of fact or judgment. Revised versions of these papers may subsequently appear in more formal publication series. The views expressed in this publication are those of the author(s). The IDE does not guarantee the accuracy of the data included and accepts no responsibility for any consequences arising from its use.